Tuesday, February 27, 2024

Overrating economic sanctions as a foreign policy tool

Dan Drezner makes an important point about economic sanctions against countries. They can do damage and inflict disadvantages on the side doing the sanctioning.

But there are big differences between great powers and smaller ones. In both cases, but especially with big powers, sanctions are not going to stop countries from undertaking actions that their leaders believe are vital to their national interests and especially to their military security. Drezer writes (paragraph breaks added):
There are ongoing disputes within the sanctions literature about their relative efficacy as an instrument of statecraft. However, there is consensus that – all else equal – sanctioning great powers is less likely to work. Great power targets are most likely to possess the strategic reserves and capacities necessary to withstand sustained economic pressure.

Furthermore, almost by definition great powers will anticipate frequent conflicts with sanctioning great powers. Expectations of future conflict reduce the probability of successful coercive bargaining even further. Finally, sanctions are particularly unlikely to cause targeted great powers to relinquish territory won through the expenditure of blood and treasure.

In the history of economic statecraft, the number of instances in which a state – much less a great power – agreed to concede territory in response to economic sanctions is vanishingly small. The likelier outcome in response to maximum economic pressure is either military escalation by the target (as with Japan in 1941) or the sender (as with the United States in Iraq and the Balkans in the 1990s). It is therefore unsurprising that sanctions failed as a tool of deterrence and compellence [sic] in the Russo-Ukrainian War. (1) [my emphasis]

In the US, many conservatives and liberals alike were drunk for decades on Cold War triumphalism and were confident about the effectiveness of throwing US weight around, especially with Russia.

The point Drezner makes make in that last part is that sanctions may lead to lead to war. in American politics, “sanctions” sound like actions that will not cause much if any discomfort to the public at home. That may be the case in the short term. But that can change over time.

And the US is no longer in the same kind of dominant position in relation to Russia and China as it was in the two decades after the collapse of the Soviet Union. The notion that hawks embraced - or at least tried to create the impression among the voters - that US sanctions in a case like those against Russia since 2022 would devastate their economy.

That also means that the more the US uses its dominant position in the world economy and the dollar’s role as the world’s main reserve currency as clubs to coerce other countries, the great the impetus is for countries to find ways to work around those problems.

As Michael Corbin recently observed:
While many in the West only pay attention to the rhetoric about Russia’s weak and collapsing economy and its economic isolation, Western policymakers need to follow closely Russia’s continued initiatives in the geopolitical sphere. Russia’s economic engagement may be complicated due to the joining of some difficult geopolitical realities, but the evolving framework has the potential to disrupt the traditional “rules-based global order” if not undermine it.

Therefore, a policy of constructive and unrestricted engagement in trade and economic relations on a global scale needs to be a key tool of commercial diplomacy for Western policymakers going forward. This would include greater restraint from the heavy-handed sanctions policies that only reduce Western access to key goods and lead to higher global inflation, the brunt of which is borne by the middle- and lower-class consumer. (2) [my emphasis]

Notes:

(1) Drezner, Daniel (2024): Asking the Wrong Questions About Sanctioning Russia. Drezner's World 02/26/2024. (Accessed: 2024-26-02).

(2) Corbin, Michael (2024): Did the West 'crush' Russia’s economy for invading Ukraine? Responsible Statecraft 02/14/2024. (Accessed: 2024-26-02).

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